March 13, 2009
BI for the Mid-Market Part 2: Comparing BI Tools for the Midsize Company
Comparing the common BI tools for the mid-market company
If we look at the main BI tools available to the mid-market company today, we see the following models: free BI, open-source BI, on-demand BI, legacy BI and dynamic Web-based commercial solutions. Each model has benefits and drawbacks, as we will see directly.
(By the way, LogiXML has a really good White paper on BI for the Mid-Market that is worth reading.)
Are there free BI solutions out there, ready for download, that can get a company squared away with business intelligence? You bet. And some of them are also pretty darn good, in the sense that they are truly free, are easy to connect, don't require much maintenance and are robust enough to give the company the tangible benefits of BI. For the sake of this discussion, we will only consider solutions that have these advantages--it's up to the project manager shopping for BI to ensure this so that the company doesn't get hooked on a (emphasis on the quotation marks) "free" product that turns into a money-pit and is hard to work with to boot.
A good free BI solution has many advantages for the mid-size company. First of all, it requires no upfront costs, which is a boon, especially in these hard economic times. Then, a good free BI solution will not be resource-intensive to build, use and maintain--which would conversely negate the savings enjoyed initially. As far as connection, it will offer the possibility to link to various types of traditional and nontraditional data sources, such as databases, Web services and flat files.
And it will do so out of the box.
Some of the better free BI solutions are Web-based, are embeddable into other software solutions or applications and are relatively robust and feature-rich. This means that if they are used to their fullest or near-fullest potential, they have the capability to empower many users within the organization to report on and analyze their data in a reliable, efficient and creative way, giving the company a chance to become much more competitive than prior to having BI. Features like tabular, cross-tab and free-style reports, drill-down and drill-through capability, rich visualization features and the ability to export reports to common formats such as Excel, CSV, Word, HTML, etc. will be in many cases all that the users need to become measurably more effective in their tasks.
Lastly, the better free BI solutions will not require upgrading to a commercial solution, but will leave that as an open option for the company. And at upgrade time, with a good free BI solution, reports won't need to be rebuilt, making the transition smooth and seamless.
A good free BI solution has very few drawbacks. If the alternative is no BI or investing time, resources and cash into a risky project, free Web-based BI available for download is the proverbial no-brainer. Sure, you may not have at your disposal the latest in dashboarding, complex data analysis tools, robust user-driven ad-hoc reporting, OLAP or advanced visualization tools like heat maps, but as far as the basics, you will be covered. And you will have these basics out of the box.
Commercial open-source BI works in this manner. The vendor takes a product that was created in the open source community and makes it their own so that they can market it. Since by definition an open source product cannot be sold, commercial open-source vendors make money through services, support and any add-ons that they have built themselves. So, although they are not selling the core product, they are still selling something.
One of the things that makes a pure open-source model attractive is the flexibility it offers for customization, although this comes with a substantial flip-side. The buyer has access to the source code, so his team can add, modify or delete anything they want. But here's the rub: as soon as they do this, they're deviating from the source. So at that point they either need to become active participants in the community (submitting their changes for everyone else to use), or they have to move further away from the core and hope not to run into any major landmines within the source that they need to ultimately fix by themselves.
Another initial lure of working with a commercial open-source vendor is the low cost of entry--since the product is ostensibly free. However, the services and support that commercial open-source vendors provide is essential to helping the client get started. Once the client goes down this services and support road, however, they face the challenges described above (they've deviated from the source) and now they're even more dependent on the vendor for services, support and add-ons.
Another negative is the fact that there is no real accountability if something goes wrong. Who do you turn to if there is a major problem with the product? Can you go back to the community to get the bug fixed? Possibly, but you're likely not going to get a resolution very quickly. Can you go back to the vendor? Perhaps--unless they're also waiting for the same fix from the open source community. This sort of bottleneck actually happens quite frequently in the commercial open-source market: the same bug exists within the commercial open source as does the main open source project. The customer can't get their situation resolved by the vendor, because the vendor is waiting for the community to fix the problem--with the sense of urgency of a more or less voluntary community.
Therefore, the fact that services and add-ons still have to be paid, plus the uncertainty of how the project will be supported in case something goes wrong often makes open-source BI risk.
On-demand BI (as well as software as a service or SaaS) is another model that has become popular in recent years. The way it works is by offering some of the benefits of BI without the hassles of hosting an application in-house. In other words, the vendor keeps, hosts and manages the application, while the client uses and pays for the application on demand through the Web. There is a whole host of companies that have specialized in on-demand business intelligence solutions or components, and, like open-source BI, on-demand has become a viable alternative to more traditional models.
The drawbacks of on-demand BI stem primarily from three factors. Firstly, the greatest majority of them are not targeted either for the smaller company within the mid-market spectrum, nor for the larger one. The smaller company can be just as well served by free BI--let's remember that on-demand BI is not free--while the larger one is better poised to acquire, refine and maintain in-house BI applications.
Then, to quote analyst Boris Evelson, "BI is still an art much more than a science. It still takes an army of consultants to pull it together, and whether I'm hosting [BI] somewhere in the cloud or doing it in-house, I'm still going to go through exactly the same difficulties. And as long as I'm doing that, why would I want to release--or lose control over--my BI installation to a third party vendor?"
And lastly, there is the issue of safety. Putting critical data and sensitive information in someone else's hands and outside of the company's own firewalls, as is the case for a solution hosted in the cloud, is not something that all firms are willing to do, which is not hard to understand.
Traditional legacy BI
By definition, traditional legacy BI is ill-suited to all but the largest among midsize firms. This is because, as we have mentioned, it grew out of the needs, the budgets and the timelines of blue-chip companies.
Aside from the huge expense associated with buying, implementing, maintaining and upgrading traditional legacy BI, there are a host of other issues that make these solutions less than ideal for the mid-market.
The many mergers and acquisitions that these companies have undergone in recent years mean that much of their product offering is technologically heterogeneous (at best) and uncertain (at worst). Of the tens of disparate BI products offered by some of the legacy firms, which ones will run on the same technological platform? Which will force the client's IT department to implement, learn and maintain products borne of radically different philosophies? And most importantly, which will still be supported by the vendor next year--and how can the client know before he buys?
Another drawback is that the prevalent licensing model for legacy BI is user-based. This means that if the midsize firm wants BI to be truly pervasive--as it should be--there will be a substantial cost.
But there is another BI model that is much better suited to the mid-market firm than all of the ones we have just mentioned.
Dynamic Web-based BI
Perhaps the best fit for midsize firms are dynamic, Web-based BI tools offered by vendors that have been specializing since their inception on this kind of software. The main differences between this model and those we have just discussed are:
- The solutions are ready out of the box, unlike open-source BI. And although they offer several degrees of customization, they are much more predictable (in the good sense of the word) as to what they can do and what they will look like once implemented
- The solutions are modular, meaning that a company can buy only as much BI as they need, unlike some of the legacy-BI solutions
- The solutions allow companies to host and own their own BI application, unlike with on-demand BI products.
The advantages of these newer, Web-based BI solutions are many--especially for the mid-market.
Easy to get started - From pricing to connection to set up, the better Web-based BI solutions save companies time and money. They do not require multiple consulting trips, and they can easily connect to one or more of the most common data sources that a midsize firm is likely to use--from databases to Web services to flat files. In some cases, these vendors have their solutions available for free-trial download, so the decision-maker in the midsize firm can test the solution with his company's own data and evaluate it against the backdrop of his own technological architecture and real-life issues.
Easy to use - Solutions that were born to run on the Web--and are not adaptations--have the easy feel and navigability of the Internet. This is advantageous to both the report developer, who can prepare feature-rich, dynamic reports with little coding and using a wizard-driven development approach, and to the end-user, who will find reporting and analysis intuitive. In turn, this will benefit adoption: if the solution is adopted enthusiastically by as many users as possible, decision-making will become more efficient and (ultimately) the firm will become more competitive.
Powerful and interactive - BI companies that were sufficiently forward-thinking ten years ago to bet all their chips on Internet technology are often the ones that introduce or are quickest to adopt the features that are truly useful. For this reason--and without departing from their easy-to-use philosophy--these BI vendors offer features like interactive dashboards, powerful visualization tools like heat maps and GIS maps with drill-down and drill-through capability, animated charts and graphs, intuitive OLAP analysis and user-driven ad-hoc reporting.
Complete and modular - Midsize firms (indeed all firms) should not be forced to buy more BI than they need or to settle for less for fear of buying too much. The key to their ability to buy just as much as they need is in the modular nature of the solutions offered by vendors. For instance, a company that has only a moderate amount of data and whose users share similar requirements may just need a managed reporting solution and should not be forced to buy a product that incorporates ETL, data marts or a data warehouse.
Conversely, one that has complex data and many users with different needs can explore the possibility of acquiring a whole platform, as long as it's complete, it's technologically unified and it features components optimized for different tasks--such as, for instance, managed reporting, ad-hoc reporting and ETL/data integration. In this sense, the components of a good Web-based platform lend themselves to being points along a firm's growth in size and data complexity--meaning that the company can get only what it needs now, and may plan on getting more BI in the future as data volumes and operations grow.
A good value - This point is easy to dismiss as intuitive--but it's all but. Value is the ratio between benefits gained compared to effort required. Failing to measure either one right from the onset is why so many BI projects fail--either because, down the road, they yield no strategic value, or because they require too much effort for the benefits they bring. So, let's start with value. A BI solution is valuable when it allows a firm to reach its strategic goals more efficiently. It does so by making data easily available, easily processed, easily understood and easily acted upon. It does so when it sifts through the white noise of less-than-critical information and pinpoints a vital action that a decision-maker must take. It does so through tools like KPIs, dashboards, automated alerts, meaningful visualization and analysis tools. And the main points of effort for a BI solution are upfront costs, IT costs, maintenance costs, licensing costs and upgrade costs. Good Web-based BI solutions bring value by offering the midsize firm all the benefits I've listed; while minimizing the effort required--through being much less expensive and resource-intensive, and through being licensed to empower as many users as a firm needs without per-user fees.
Posted by Hound of the BI-skervilles at March 13, 2009 2:30 PM
Hey Hound of the BI-skervilles, I read your post and thought I would add to the conversation by posting at BI for Business People. A few more stats about BI and a rant or two.
Posted by: Tom at March 16, 2009 5:24 PM
There is a BI ToolBox comparison website where all these issues come together. They digg into web-based bi, open source bi, the difference between reporting tools and bi tools ( http://www.businessintelligencetoolbox.com/reporting-tools.htm ), on-demand business intelligence and data integration, role-based reporting, et cetera. By the way, prices for BI tools are decreasing in recent years, so the midsized companies can have a business case too!
Posted by: Reporting tools - Daan at April 3, 2010 8:51 AM